Beware! PumaBroker is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
PumaBroker is an intermediary providing access to various brokers that offer trading in Forex, Commodities, Equities and Indices. As they put it on their home page, “the services as well as the trading conditions displayed in this website are provided by the Final Broker and not by PumaBroker.”
The broker advertises 4 types of accounts, depending on the minimum deposit required, the spreads offered, as well as the size of bonuses and promotions.
The registration page was not easy to find – there is no direct link to it or to a login page. When we finally found it, we had to submit our Names, Email address, Phone number and Country. The process was successful and we received two emails, the first one from another broker with a link to a client area login, the second one from PumaBroker, but the link in the email led to a login page for a web-based platform of the same broker as the first email.
The client area was nothing special – it had the usual Market quotes for different types of trading instruments, a Copy trading page with featured traders, and a link to the trading platform.
PumaBroker Regulation and safety of funds
PumaBroker is the trade name of Taboo Capital LLC incorporated in Saint Vincent and the Grenadines. SVG is an offshore jurisdiction in the Carribean that does not regulate forex, binary options, or crypto-currency trading or service providers. In the Terms and Conditions page, which was also hard to locate, we read that the “use of this website shall be governed by laws of Cyprus ,” so we checked the Cyprus Securities and Exchange Commission (CySEC) register, but neither of the entities returned any result.
What we actually found about the broker is that there is a warning issued by Spain’s Comisión Nacional del Mercado de Valores (CNMV) for both entities that they are not authorised to provide investment services:
PumaBroker claims to give traders the opportunity to access the services of secured and regulated brokers – since they are not a direct provider, but only a middleman, we need to check the broker we were referred to after registration, to see how this statement holds up.
EverFX, the company whose client area we accessed, is a tradename operated by ICC Intercertus Capital (Seychelles) Limited, registered in the Seychelles – another offshore zone. When we clicked on the Verify button in the client area to complete our profile we saw the name of a third offshore company.
Digging deeper we found out that these companies and the website are included in a Blacklist of websites and companies illegally soliciting investors published by the Authority of financial markets (AMF) of Quebec, Canada.
Considering this it is hard to trust these claims of “secured and regulated brokers” we saw on PumaBroker’s website. Brokers regulated by CySEC or UK’s Financial Conduct Authority (FCA) have to abide by very strict rules. They have to maintain Minimum Capital Requirements of €730,000 to ensure their good financial standing and participate in Compensation Schemes that provide additional guarantees to investors’ funds in case the broker goes bankrupt – up to 85,000 GBP in the UK and 20,000 EUR in the EU. They also have to follow the Client Account Segregation policy – clients’ money must be kept separate from their own operating funds, and the Negative Balance Protection policy, which ensures that traders may not lose more than the total sum deposited.
PumaBroker, however, is a non-regulated, offshore broker so these rules and guidelines do not apply to them. In this regard, we warn our readers that investing money with them presents big risks.
PumaBroker Trading Software
From the client area there is a direct link to a web-based trading platform – Status Webtrader. This software is not well-known and looking at its features and design we understand why – it does not offer even a fragment of the features established platforms provide, not even a Demo account.
The broker also provides the MetaTrader 4 (MT4) trading platform. MT4 is the world’s leading platform, preferred by more than 80% of users. It features an intuitive, user-friendly interface, advanced charting and analysis tools, as well as copy- and auto-trading options. It is customizable using the proprietary MQL4 programming language, with which one can create different trading strategies. It is also available as a Desktop and Mobile (iOS and Android) applications and offers a demo account option.
PumaBroker Trading Conditions
The broker’s trading conditions are not outrageous; for the top-tier accounts they are quite competitive, really. The EURUSD spread we saw in the trading platform fluctuated around 2.2 – 2.3 pips as advertised on the broker’s accounts. There is no way to verify the lower spreads, however, because the minimum deposit threshold is considerable.
The starter account also comes with an up to 1:500 leverage, however. Such leverage can be quite risky – it can make big profits, but if you lose, the losses will be huge too, often much greater than the invested funds. That is why, most regulatory authorities impose leverage caps for non-professional traders: in the USA it is 1:50, while for brokers licensed in the EU and the UK it is 1:30.
PumaBroker Deposit/Withdrawal Methods And Fees
In the client area we see the standard payment methods – Bank transfer and Credit / Debit card, as well as some more exotic ones.
Sofort is an online banking-based payment method popular in Germany, while the other two, Uphold and VC turned out to be cryptocurrency platforms. Bitcoin is a preferred method of scam brokers, as it is anonymous and untraceable. We should also note that the broker does not support PayPal, or e-wallets, such as Skrill or Neteller.
The minimum deposit amount of $250 is very big – there are legitimate brokers with whom you can open an account with only $10. But what is more disturbing is that there is no information whatsoever about withdrawal conditions and fees. Without these being precisely specified, and taking into consideration that the broker is not regulated, we would recommend not to invest with PumaBroker!
How does the scam work?
Here we will outline the most common scamming scenario. The first step is to capture the users’ attention with ads promising fast money. When they click on such an ad, they are redirected to a website that would ask to provide their email address and phone number. This personal information is then used by the scam brokers who will start calling and asking to invest with them. The initial deposit is usually around $250 from which these brokers will make a fat commission.
After that, users are transferred to senior brokers. These are expert con-artists who will sweet-talk them into putting even more money. When the traders decide to get out, however, it turns out it is not that simple. The scammers will talk them into postponing their withdrawals or will draw out various reasons to deny the request. All of this is with the objective to miss the limited time period for filing a chargeback with their bank and get their money back.
We should note that VISA and MasterCard have recently taken measures to combat online scams and are classifying all forex transactions as high risk. Furthermore, they have increased the period for filing a chargeback from 6 months to 540 days.
What to do when scammed?
In the event you become a victim of such a scam there are some things you should know. If you used a major credit card to fund the account you should immediately file for a chargeback with your bank or credit card provider. In case you supplied sensitive financial information to the scammers, such as account details and passwords, you should cancel your credit card or change your pass.
If you used bitcoin or bank wire, however, chances of recovering your funds are slim. Do not get hooked by any “recovery agents”, who prey on scam victims, using their hopes of retrieving their money. These are just another type of scammers who will ask you for an upfront fee in order to get your money back, but once you pay them, you will not hear from them again.
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